It is common for a person or entity to desire insight into the financial condition of an organization, either for-profit or not-for-profit. For example, auditors and accountants may want to confirm or validate that an organization's financial condition is as reported or expected. Or, members of the Board of Directors, attorneys, financial analysts, franchisers and franchisees, insurance underwriters, securities analysts, investment bankers, investors, and/or bankers might want to analyze the financial condition of a business entity before making an investment, underwriting, or lending decision. Or, a third party funder such as a government agency, a private foundation, or an individual donor might want to gain an insight into the financial workings of a not-for-profit organization before granting or donating to that organization.
There are several factors to look at when analyzing an organization's financial condition to determine investment, lending, underwriting, donating, etc. desirability. However, looking at pages of balance sheets, income statements, and cash flow statements can be cumbersome, tedious, and, without analysis, unrevealing. Thus, it would be desirable to have a single financial analysis method and tool that uses readily available data to reveal the level of profitability that is required for an organization to finance its revenue growth (either positive or negative), that reveals alternative financial strategies employed when profitability levels were insufficient to finance revenue growth, and that reveals the level of profitability used or needed by an organization to remain solvent. Further, it would be desirable to have a single financial analysis tool that could be applied to past and present financial data and to future projections of financial results, and that could be applied to different periods of time, e.g., calendar month, fiscal quarter, or fiscal year.